Tamarisk Inc. acquired 20% of the outstanding common stock of Theresa Kulikowski Inc. on December 31, 2020. The purchase price was $1,097,800 for 49,900 shares. Kulikowski Inc. declared and paid an $0.85 per share cash dividend on June 30 and on December 31, 2021. Kulikowski reported net income of $769,000 for 2021. The fair value of Kulikowskis stock was $25 per share at December 31, 2021. Assume that the security is a trading security.

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Prepare the journal entries for Tamarisk Inc. for 2020 and 2021, assuming that Tamarisk cannot exercise significant influence over Kulikowski. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter Ofor the amounts.) Date Account Titles and Explanation Debit Credit 31, 2020 Equity Investments 1,097,800 Cash 1. 30, 2021 V Cash 42,415 Dividend Revenue 31, 2021 V Cash 42.415 Dividend Revenue (To record dividend.) ( Fair Value Adjustment 149.700 Unrealized Holding Gain or Loss -Income (To record fair value.) e Textbook and Media List of Accounts Attempts: 2 of 3 used (b) Your Answer Correct Answer Your answer is correct. Prepare the journal entries for Tamarisk Inc. for 2020 and 2021, assuming that Tamarisk can exercise significant influence over Kulikowski. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) Sate Account Titles and Explanation Debit Credit , 2020 Equity Investments 1,097,800 Cash 1,09 ), 2021 Cash 42.415 Equity Investments 2021 Cash 42,415 Equity Investments (To record dividend.) Equity Investments 153,800 Investment Income 15 (To record revenue.) (c) At what amount is the investment in securities reported on the balance sheet under each of these methods at December 31, 2021? What is the total net income reported in 2021 under each of these methods? Fair Value Method Equity Method Investment amount (balance sheet) $ 1,247,500 $ Dividend revenue (income statement) Unrealized holding gain (income statement) Investment income (income statement) e Textbook and Media List of Accounts Save for Later Attempts: 0 of 3 used Submit